Small webcasters rocked by licensing issues

Last week we began receiving notes from webcasting clients of two large hosting companies, Radionomy and StreamLicensing, noting that recent changes and communications had troubled their webcast stations. The two situations are coinciding in time, but are unrelated to each other. However, both are about music licensing.

Radionomy Streamlines Its Streams

At Radionomy, one station owner told us that voice announcements appeared in station streams notifying customers that station listening in the U.S. would be limited to Radionomy-owned players — in other words, the Radionomy.com website player, and the Radionomy mobile app. In the Facebook group for Radionomy producers, station owners complained that they did not receive notice from Radionomy before the change was implemented, and noted that their traffic metrics showed sharp drop-offs in U.S. listening as a result of the presumed geoblocking in non-Radionomy apps. Since some stations must maintain a baseline of listening hours to qualify for Radionomy hosting, some owners feared losing their stations.

Why? It’s about the cost of music in the U.S., a tenacious business problem for all stakeholders in the American small webcasting ecosystem since the expiration of protective legislation (the Webcaster Settlement Act of 2009) on December 31, 2015. At that same time, a higher webcast royalty rate paid by webcasters to labels was set by the Copyright Royalty Board, the second blow of a devastating change in how small webcasting is regulated. As a result, this from Radionomy: “Radionomy needs to slow down the proliferation of the multiple platforms distributing Radionomy Stations streams due to the important increase of the US Music Rights cost.”

In a bit of added context, Radionomy said that advertisers are less interested in non-Radionomy distribution apps, so monetization of Radionomy’s ad-supported business is more difficult through them. Hence the concentration into Radionomy’s house-owned apps and iTunes.

StreamLicensing Grapples With Licensing

At about the same time StreamLicensing, a competing webcast host, had its hands full with disgruntled station owners and a broken contract with ASCAP, one of the world’s largest Performing Rights Organizations (PROs) which represents songwriters who partially own a significant portion of recorded music played on internet radio.

The station owners heard from ASCAP first, notifying them that StreamLicensing’s ASCAP license had been terminated by ASCAP, and inviting station owners to “obtain a discounted, easy-to-administer license agreement directly from ASCAP on ASCAP.com.” The communication was both surprising and baffling to some, and probably unwelcome to all, as the StreamLicensing host plan includes music licensing. Few if any station owners wish to enter into direct contract with a royalty collection agency, or take on the administration tasks required to license music.

ASCAP asserted that StreamLicensing had breached its license, and failed to pay for some (undisclosed) licensing period. StreamLicensing disagrees, and told RAIN News that the company had been inaccurately billed for royalties for “streaming elements that were not applicable to royalties.” CEO Anthony Michael Hernandez told us that he had hired an independent auditing firm with extensive music licensing experience to examine the situation, and also brought on a software development team to join the review.

Hernandez said he believes the PROs might owe money to StreamLicensing, not the other way around. He called ASCAP’s action “bullish” and “vicious.” In a communication to station owners, Hernandez said, “StreamLicensing has been working with representatives of the performance rights company regarding what we believe is an inaccurate data count that impacts what we pay to ASCAP. That matter has not been resolved but the unilateral action was taken anyway. We are in the process of reaching our ASCAP contact and urge you to stick with us as we work out a satisfactory resolution that protects you and your streaming service and the legal rights of our company.”

ASCAP sees it differently, confirms that it terminated the StreamLicensing license on June 30, and that StreamLicensing can not provide ASCAP licensing to station owners as of July 1. ASCAP stated that any claims that the PRO acted inappropriately, or outside its rights, are false. In framing a public statement, ASCAP reflected its representation role to songwriters and composers: “We very much appreciate that customers of Streamlicensing.com value the creative work of the songwriters and composers whose music they use on their services, and we regret that they are being inconvenienced by Streamlicensing’s breach of the ASCAP license. That is why ASCAP is working directly with Streamlicensing’s customers to make the transition to an ASCAP license as smooth as possible.”

Conclusion

While station owners might have legitimate complaints with how licensing issues have been communicated and remedies implemented, the cost of music for small-business webcasting (which is often semi-pro or hobby webcasting), and the built-in complexity of multiple music stakeholders, are regulatory facts that settle into all levels of the webcasting ecosystem, from Spotify and Pandora to a hobby internet radio station. As was the case in late 2015, as the Small Webcaster Protection Act neared expiration, a collective and organized lobbying effort seems like the best hope of improving the business conditions for small webcasters and their hosting companies.

Classic example of shooting oneself in the foot. I’ve been echoing Jeff’s sentiments for the last 6 years. That’s when we shut down 7 streams thanks to legalized “reverse” payola. Simply couldn’t cover the costs to “advertise” others’ wares.

I would encourage everyone to make pirate radio stations as soon as possible. Because ASCAP has chosen to be a big bully on top of Sound Exchange’s ridiculous rates since the Small Broadcaster Agreement expired, the music industry deserves a Napster style punch in the nose for how they’ve treated small broadcasters.

I’ll leave your comment, despite its advocacy of illegal activity. Respectfully, the “punch in the nose” you recommend might not even be noticed. That’s not an insult; I’m just putting the marketplace in a different perspective. The major label royalty market is mostly comprised of the major streaming services. Pandora alone contributes over half of SoundExchange royalty collections. The labels need to hear that large numbers of constituents (listeners, artists) care about specialty webcasting. This takes long-term organizing, targeted to the Copyright Royalty Board process. The next CRB decision comes in December, 2020. The Washington D.C. process starts about two years before. That means now is the time to begin planning, organizing, raising funds to participate in the litigation, recruiting esperts to testify, conducting consumer research, building artist groups to advocate.

Well said and succinctly put Brad. Indeed time is nigh to begin rooting some grass for “small” independent webcasters for 2018 CRB hearings. Thing is, it’s an extremely enormous & expensive effort to “herd cats” if you will… coupled with a very different landscape today.

I was a participant in the “grassroots” coalition(s) that descended upon Capitol Hill in 2007 & 2012. Major savoir success in 2007 resulting in the SWSA (small webcaster settlement act) and a reprieve in 2012.

That said, back then, small webcasters basically rode on the coat-tails of Pandora’s big but desperate bank roll with hired (lobby firms) guns, DiMA, and RAIN’s megaphone. Given that Pandora is now exponentially bigger with even bigger fish (issues) to fry today, I don’t see them joining the party this time around. DiMA? Maybe..worth a plea I guess.

Not saying it’s not worthwhile for a concerted effort starting now…it’s just the starting block$ have been moved waaay back for small (hobby to <1.25M revenue) independent webcasters. Film at 11 as they say……[sniff]

The goal here is very simple: To get rid of free streaming, and replace it with some form of subscription streaming. The music industry, from the artists to the writers to the rights owners all are saying the same thing: Free music will kill the music industry. So they view any free stream is freeloading. As Brad Hill says, streaming doesn’t lead to sales. Streaming is a replacement for sales. People are streaming, and not buying. So someone needs to pay for the music, and I’m sure the advertising isn’t covering the royalty fees. You can see what the major streamers, like Apple, Spotify, and Pandora are doing. There’s a reason. The artists don’t need webcasters. They can do it themselves.

The BIG reason FM Radio is not complaining BIGA is that they are not paying– ANY royalty whatsoever on the sound recording on their OTA broadcasts.

Webcasters pay both songwriter/composer royalties (ASCAP, BMI, SESAC) and sound recording royalties (SoundExchange). The difference is staggering my friend. Today, FM radio’s exemption in this space is the epitome of an un-level playing field and in relative terms…one of the biggest rip-offs of the past 30+ years. ptooey

Most small webcasters I’ve listened to (mostly American, some are located in other countries, though) are individuals doing webcasting as a hobby, trying to keep certain genres of music alive, many of which exist solely on donations from a small handful of listeners.

Many FM stations I’ve listened to, on the other hand, are owned by large media companies, which explains why they aren’t complaining.

What I’m pissed off at is the lack of transparency at Radionomy. For almost two weeks, producers have been in the dark about the new policy implemented by Radionomy management. No one had a clue what was happening. I’ll be moving my stream somewhere else. You get what you pay for….or in this case what you don’t pay for.

Streamlicensing is definitely the same as Radionomy at this juncture. When the ownership of the company changed hands from an individual to a corporation, they inundated us with regular updates regarding where we were in the transition.

Since the transition, this situation has clearly been brewing with ASCAP, but we heard nothing about it, until ASCAP took the initiative to reach out to us. Regardless of if ASCAP’s intentions (yes, very likely a “pay or else” bullying tactic), we still should’ve heard about it from SL first!

I’ve been with Radionomy for several years now. From the very beginning I figured they were more like a radio pyramid scheme. All the listeners of the free broadcasters eventually end up at the top “Radionomy Owned Channels” I say this because they messed up their own RMO so stations couldn’t tell how many listeners they have so the numbers could be manipulated. This and other problems always came about evaluation time causing stations to lose listeners. I’m guessing Radionomy owned stations were rock solid during these times and the wondering listeners would simply listen to their station. I’m pretty sure the latest geo-blocking and announcements to go to radionomy dot com to listen to this station is the final phase of their plan of directing all listeners to their own stations. Then comes discontinuing the producer ran stations.

Radionomy=incompetence, lack of support, lack of transparency, manipulated numbers and a totally disrespectful attitude to producers. Yes, it´s free and we get what we pay for, but there are some other superb free services online that work as should and at least have a word of support to users. And they lied in the past telling us they paid royalties for us. Shame on you Radionomy.

As one of the many radio producers on the Radionomy platform (and StreamLicensing before the giant price hike) I’m surprised to hear the reason’s why our streams are bring limited in USA from a news site before Radionomy. This says a lot about what Radionomy thinks of its core / user base… NOTHING.

Thanks so much for digging into this and reporting on the problems.. we all here at Radonomy would still be in the dark with out you.

The very first Internet radio station I was on in 2004 instilled in me “We’ve got to pay royalties! We want the artists to get paid for their work, and of course we also don’t want to get fined/shut down!” This was back when we had two large lists, one from ASCAP and one from BMI, and we had to search those lists before we played any artist to either make sure that artist was on that list, or else we had to reach out to them directly and ask if we could play their music; back then it was especially hard to find contact info for your favorite artists, and even less likely you’d hear back from them the bigger they were (READ: NO TWITTER!).

Despite that logistical nightmare (and thankfully the rules loosened up as time went on), every project I’ve headed since then has been legitimate, and I’ve lost DJs because of it: What do you mean my tags have to be right? What do you mean I can’t play the entirety of Dark Side Of The Moon? People aren’t going to wait an hour to hear requests. F THIS, I’m going to XYZ Pirate Radio who don’t require any of this!

I’ve also not been able to carry many syndicated shows because they come as 1 file with no song titles, and even if they provide a playlist (which they were often lax on), it was just too much strain on my time to be able to upload those in a timely manner because of the manual effort still involved.

Through all of that THIS is now how I’m repaid. I’ve labored/slaved over a station for 10+ years, put a lot of money into it that I’ll never (nor did I ever expect that I would) get back, and I’ve now got to scrap it all because the alternative is being fined for non-compliance, something I’ve worked hard to avoid since 2004.

I could not have said this any better. This is exactly my life as well. The DJs that backstab you because you wanted to do it by the book, the diligent reporting, the conformity in website design … all of it. I am hanging it up because I have just had it. Been doing Internet radio since 2003 and have had to deal with the continuing licensing and broadcasting rules constantly. It is just no fun anymore.

Thank God for those of us OUTSIDE the U.S. ASCAP and BMI can not and do NOT affect streaming activities by small webcasters. Of course Radionomy has along with the NEW shoutcast are fronts for the very same people. I wouldn’t use Radionomy or be listed on shoutcast if they paid me cash money!

In the end if you are based in the U.S. it’s going to be a very long haul BUT if you have access to servers outside of the U.S. and can get you stationed OUTSIDE the U.S. then this type of problem goes away!

Actually you appear to have the same misunderstanding many others have. The reality is if you host stations and servers outside of the USA, you are still liable for USA streaming royalties if your station can be heard by listeners in the USA. In the USA, it is based on where the listener is located, not where the station is located.

I remember those days well: emailing diverse musicians *if* I could find their contact info to ask “Can I play your music on this hobby Internet music-streaming service I DJ on?” Once, I wanted to play music by a Roma band, Dikanda, from Poland. Luckily I happened to have a Polish co-worker who could translate for me, and I actually got a reply from their lead singer saying their music was all public domain/traditional anyway, so go ahead and thanks for sharing it with people. Another time I emailed the Scottish bagpiper Hamish Moore for permission to play his stuff (my show, with lots of world music, put the “Ech!” back into eclectic.) His reply as I recall was more terse: “Nae problem!”

I spent more hours grooming (“Bryanizing”) my mp3 tags for perfect accuracy to ensure that artists got their $0.01 royalty per play than I did playing shows on the air total.

This whole thing is about eliminating the little guys and engaging in rent-seeking behavior to lock in their revenue stream. They want to drive out the small hobby streamers entirely then go after the few big guys that are left for the big bucks.

Now that Net Neutrality is a thing of the past you’ll see more and more of this type of behavior everywhere on the Internet. DARPA and universities built it, our tax dollars paid for it, but it’ll only be for Big Business to use to take our money.

I am reminded of an old Vietnamese proverb: “When elephants fight, the grass is trampled”.

I am an internet broadcaster. I play music I am passionate about. I have a small audience, which I’m satisfied with. I am willing to pay for the privilege, and I do. I pay royalties via StreamLicensing, but more than that, I buy all the music I play. If I have to pay ASCAP on top of what I’m paying StreamLicensing, that works out to the price of one album a month, roughly. I can deal with that.

What I am bothered by is getting caught in the middle of somebody else’s dispute. I have StreamLicensing in one ear, telling me one thing, and ASCAP in the other ear, telling me something else, and I have no idea who to believe. If I pay what ASCAP is demanding, I am defeating the whole purpose of having StreamLicensing in the first place, as well as weakening StreamLicensing’s position if they’re the ones in the right. On the other hand, if I tell ASCAP to jump in the lake and go on as I have been, I’m putting myself at risk of fines and legal action. I’m seriously considering just stripping every ASCAP-published song out of my playlist until something gets worked out, and hoping for the best.

And that’s where the grass-trampling comes in. I play a lot of well-known songs by popular artists who wouldn’t notice the difference if I went away, but I also play a lot of small artists, artists who work at the level where every new pair of ears that hears their song is a victory. And as I mentioned, I buy all my music, so everything I play has generated at least one sale. If I wasn’t doing this, I probably wouldn’t buy a third as much as I do now. I did the math, and if I’d saved the money I spent on music over the years, I’d have enough for a new car, and a fairly nice one. And let me tell you, a lot of bands and labels really appreciate it. So as usual, the major players who have access to the big media and large-scale promotion and distribution machinery get taken care of, while the little guy loses yet another option.

So, I don’t know what I’m going to do, but I’ve got ten days to figure it out, I guess. Sigh… maybe I’ll just pack it in and buy that car instead.

I’m in the business on the artist promotion side, while I don’t full understand the challenges of small webcasters, maybe I’m not understanding the sentiment here, but I do get the idea that the majority of sentiment is that the people commenting above, wanna be able to play, stream artist’s music without paying to do it. If they don’t pay for some sort of license , then how’s the artist gonna make money? Sales aren’t what the were, for the small artist now its all about royalties. In the modern age of fake news or fake media, anybody I guess can make a webcast, and by spinning their own music or their buddies alot give the appearance of importance, but what does this accomplish for the general artists who aren’t their buddies?
At least with FM radio, which might shadow with the simul webcast, we artist promoters have a program director, to send material too. Those stations that are organized report to charts, the number of spins and so forth. Yes any small web-caster can do this too, but in my experience they don’t.

I will say, each and every time I’ve been solicited to send a package to a small web-caster, its been a waste of postage stamp.
Yes maybe everybody can have some sort of hobby web streaming thing, but once they start trying to make money with ads, then its a business. So I don’t hear much sentiment for the artists, thats what I wanna say. The small casters can organize themselves better IMHO.
I don’t know what the fees are, most articles like this, don’t show the fees small casters gotta pay.

This is a station my family and I used to listen to when we first discovered internet radio. http://www.joy995.com On the station’s now defunct website, they explain that they had to shut down because the fees they pay became unaffordable. That’s the issue many small webcasters like that station are facing. Many of them are zero profit operations, done strictly for the love of music that is no longer getting mainstream radio airplay.

This is a station my family and I used to listen to when we first discovered internet radio. www(dot)joy995(dot)com On the station’s now defunct website, they explain that they had to shut down because the fees they pay became unaffordable. That’s the issue many small webcasters like that station are facing. Many of them are zero profit operations, done strictly for the love of music that is no longer getting mainstream radio airplay.

The exact fees right now are $59.50 a month or $714 for a year. This is up from about $240 a year which is what I started 10 years ago with no addition or reduction of services provided in that time.

Now with ASCAP on board, we’ll be pretty close to $1,000 a year and allegedly we’re responsible for our own record keeping (songs played, how many listening during the song into TLH calculation), something which we’ve paid Streamlicensing and precursor companies for. Now we’re paying more for less service, will be spending more time organizing and reporting records, with more chances of making a mistake that will get us fined — no thanks!

I’m also lucky on cost because I have a friend who’s a webhost that provided me with free webspace and another friend who designed the site for free. The expenses are even higher for any station that pays a webhost and designer (squarespace), and a station I’m closely affiliated with took it a step further and they pay a host monthly to have a remote box that only has legally obtained music on it and all their DJs have to Skype/remote in and DJ from that box to reduce any chance of music piracy. They’ll be closing down this weekend too.

I’m just a listener. The station I listen to has no ads, and pays more in fees than they get as contributions from people like me. They can barely afford to operate their station as it is, paying StreamLicensing to handle their paperwork, etc. This is simply going to be too much work and expense. It’s either a fantasy on the part of middlemen (who’ve apparently been snorting too much coke paid for by the talent and purchases of others for too long) or a pure power play. It certainly can’t be about the pittance that even the exorbitant fees would amount to in their bottom line. Somebody needs to grow up and recognize that the people who pay non-profit licenses aren’t the ones ruining their business model. They should look at themselves and the fact that they’ve had it so good in the past.

Hi Sherry
One of my streaming partners called ASCAP and asked them that. They replied saying that there is, however they would not give out the name of that company. I’m sure it’s more beneficial for ASCAP to have our direct business than to go through a proxy which strips some off the top.
Needless to say, me and my partner ceased operations at the end of July because we didn’t want to be pawns in this game.

After acquiring a new owner, the just flatly started rescinding reseller agreements with all the affiliates that had fed them all their accounts and stopped paying out the commissions to stations that were referred to them by the resellers. Then, they had another great idea. They would create a “legal player’ as interpreted by them from SoundExchange laws, making it so now one had to use ‘their’ player that they could then keep all the ad revenue from.

They basically ripped off the resellers first, THEN they told all the companies using their royalty-payment service (if you can call it that – they are currently sending out requests even to old customers in order to get the records meaning they must be way behind in their reporting as station owners have reported to us) that they would have to stream with their ‘legal player’, that they happened to be partners with in order to keep the ad revenue. Otherwise, no streaming with StreamLicensing…period!

If you call or email to ask about any other streaming provider other than the one they make you use, the badmouthing by their couple of remote office workers is the worst ever heard.

Oh, they just switched streaming hosts and players again…check it out.

This company should be immediately investigated by SoundExchange, SESAC, ASCAP and BMI.

I am trying to obtain proper licensing for a new internet station. I have attempted numerous times to contact streamlicensing.com with no success. No one will reply to my emails. And here’s the kicker…the only phone number they have listed on their site is no longer a working number. Something is definitely wrong. I give up. I am contacting BMI, SESAC and ASCAP directly.

This is a GIANT Mess.
I worked in broadcast TV & Radio for many years, but there are no damned jobs anymore. Hell, I heard from one of my old bosses last week. I was hoping he was calling me WITH work, he was calling me asking FOR work!

I started a Radionomy station, but I’m good with Programming a Radio Station, NOT marketing one. We did okay numbers, and were growing, but not fast enough and got shut down.

This situation is like a hydra with a ton of heads.
1) Small broadcasters don’t get paid to do this. We depend on revenue from Radionomy (or whomever) to pay us IF we have enough listeners. Further, making a GOOD station is going to be a FullTime job.
2) I’m also an artist, so I appreciate them wanting to get paid too. Equipment isn’t free, nor are studios, etc. Plus there’s that whole rent and food issue.
3) The Big broadcasters really don’t serve the smaller artists or more obscure genres, so it doesn’t mean much for the small artist that KRock pays royalties, considering the PD there won’t take their calls or listen to their tape

I started doing Radionomy because I knew I could make a solid station and we had good listenership, but Radionomy would help itself by putting us on staff and paying us like we were employees. Then hiring a team to market the stations.

Stream Lic revoked Spiderwebradio’s license when I asked for help to upgrade to SHOUTcast2..said to take down their links from our website and contact him when we “figure it out” I was using their Lic pkg “Shoutcast1” I can’t contact them, because they closed my account. Very weird, we’ve always paid them and filed reports as requested. L2MR kept saying they can do it, but need my permission as all of our data would be deleted. We replied with our ok and understanding. Nothing happens. I follow up and get no reply. I have done this frustrating loop over a dozen times! I gave up today. SWR is off the air after 13 years and mixing indie rock with mainstream rock.

Radionomy is shit. Don’t trust them. They are full of problems, lawsuits, Warner Music has threatened them to sue them again… lack of professionalism and incompetence. Hire a good radio server and go with it.